What Small Businesses Need to Know About Trade Finance in Africa
African Development Bank and Making Finance Work for Africa (MFW4A) in collaboration with the Africa Regional Committee (ARC) of the International Trade and Forfaiting Association (ITFA) invite you to our Trade Finance Banking seminar aimed at African trade finance professionals in West and Central Africa regions themed: “The Evolving Landscape of Trade Finance in West and Central Africa Regions” happening on 2 October at 09:00 GMT. English and French simultaneous translation will be available.
The global trade finance landscape is undergoing significant transformation, propelled by the dual forces of technological advancements and stricter regulatory frameworks. This intricate environment presents both opportunities and challenges for financial institutions. In the context of trade finance in Africa, the continent is characterized by its diversity, yet it displays distinct traits that resonate with global market trends. Nevertheless, the challenges associated with trade finance in West and Central Africa are particularly pronounced when compared to other subregions on the continent.
According to the third Trade Finance in Africa report published by the AFDB/Afreximbank in 2020, Central and West Africa experienced the highest average default rates on trade finance applications, recorded at 8% and 7% respectively, while their average approval rates were the lowest, at 75% and 79%. Additionally, Central Africa has the highest rejection rate for SME trade finance applications, nearing 47%. A recent study conducted by the IFC and WTO in 2022 on Trade Finance in West Africa, which surveyed financial institutions across the four largest economies in the ECOWAS region (Cote d’Ivoire, Ghana, Nigeria, and Senegal), revealed that trade finance facilitates only 25% of goods trade in these nations, significantly lower than the African average of 40% and the global average of 60-80%. Furthermore, the trade finance gap for these four countries is estimated to be approximately $14 billion annually.
This webinar/seminar aims to enhance comprehension of international trends in trade finance and their effects on trade finance markets within Africa. It will address the significant movement towards digitalization in trade finance, as well as the challenges associated with compliance and regulations concerning financial crime. Additionally, the initiative seeks to create an educational platform for banks in West and Central Africa engaged in trade finance, promoting collaboration with the ARC of the ITFA.
oin us for what promises to be engaging session on Trade Finance Banking in West and Central Africa! Register now.
